Create a home that’s tailor-made for you and your family by buying a property that’s in need of some attention and renovating it. A ‘fixer-upper’ typically costs less than an ‘already fixed-up’ equivalent, which means you could afford a home in a more desirable neighbourhood or substantially boost the property’s value as an investment.
Before you start your property search, consider the scale of the work required, your budget and whether you’ll need somewhere else to live while the work is underway. Once you’ve purchased your project, schedule the jobs to make the best use of your time and money.
How to buy and start a renovation project
Buy a renovation project at action
Buying a house at auction is a good opportunity to find a bargain. A property can go to auction for various reasons: the owners might need a quick sale; the property might have a short lease; there might be sitting tenants, a structural issue or something else that makes it difficult to sell via an estate agent. Read the legal pack to find out what the issue is and seek legal advice on whether it’s resolvable.
Once bidding begins, each lot is sold to the highest bidder, as long as the reserve price (which isn’t disclosed) is met. You pay a 10 per cent deposit and exchange contracts, then complete 28 days later. Always view the property and area in advance, and attend an earlier auction so you know what to expect, then set your maximum bid and don’t exceed it.
Research ceiling prices
Set a budget for the purchase and renovation and stick to it. Figure out a fair purchase price by checking what equivalent local properties, both requiring work and fully renovated, sold for on Rightmove and Zoopla. Also get an estate agent to give you an idea of the property’s ceiling price (the maximum it will sell for), as well as its predicted post-refurbishment value to figure out which jobs will get the best return on your investment. You’ll also need to determine how much the renovation work will cost. Labour and materials costs are rising and can change fast, so its more important than ever to ensure you don’t overspend. To avoid doing so, set aside a contingency fund to cover any unexpected costs or price rises
‘We always recommend that homeowners who are planning improvements make a contingency budget in case of unexpected costs, and this has become particularly important while we continue to see such uncertainty in the market. Inflation is really affecting the price of home improvement and is a big contributing factor to the increases we’re seeing as the cost of raw materials continues to soar.’
Mike Fairman, CEO at Checkatrade
Assess the state of the house
It’s vital to know what you’re getting into and whether structural or other major repairs will be required. On your first viewing, check for large cracks in plasterwork, missing roof tiles and signs of damp – flaking plaster, staining on walls and ceilings, and musty smells are all giveaways of damp. Once you’ve decided to buy, get a Royal Institute of Chartered Surveyors Level 3 survey (previously called a full structural survey) done before exchanging contracts or the auction date. The survey contains detailed information on the property’s condition, risk and causes of potential or hidden defects, an estimate of costs and timescales for remedial work, and recommends further action to be taken.
Check for the non-negotiables
Even if you’re happy taking on a property that requires complete refurbishment, there are some that should simply be avoided, however much of a bargain they appear to be. Anywhere with ongoing subsidence is unlikely to be granted a mortgage and could be impossible to sell at a future date. Steer clear of anything with Japanese knotweed as it can cause structural damage, and be wary of a house with private drainage – meaning it’s not connected to the mains drain – as you’ll be responsible for maintaining it. Avoid buying a non-standard construction property – such as a timber-framed building – as you may have problems getting a mortgage and reselling it
Consider the potential
Unless you’re proposing to flip the property to make a quick profit, you’ll likely be living there for at least a few years so it will need to work for you and your family. Consider the layout, whether the space flows and how many extra rooms you want to add. If you want to extend it, check that there’s enough space to build on and whether neighbouring properties have been extended or had their lofts converted. Before you go ahead with an extension, speak to your local planning department to see if your plans fall within permitted development or if you’ll need to obtain permission. Consider where you’ll be living during major works – you’ll want to be based nearby if you can’t stay in your home.
Build a team of trusted tradespeople
Few people have the requisite skills and expertise to completely renovate the property themselves from start to finish. Even a relatively simple refurbishment is likely to require a builder, plasterer, electrician, plumber and carpenter. More complicated renovations will probably require an architect and structural engineer or surveyor as well. When choosing a tradesperson, get at least three quotes and ask to see examples of previous, similar work and references. Co-ordinating the build yourself will save money but is very time-consuming, so you might want to consider hiring an experienced project manager whose responsibilities will include sub-contracting tradespeople.
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